Do Arbitration Clauses Really Take Away Your Rights at Work?

Arbitration clauses don’t erase your civil rights. Learn how the EEOC and state agencies can still take action if your employer discriminates.

If you’ve started a new job and spotted an arbitration clause in your employment contract, you might wonder:

Does this mean I can’t take legal action if my employer discriminates against me?

Employers often want you to think the answer is yes. But the truth is very different: an arbitration agreement does not cancel out your civil rights.

In fact, federal and state law still protect you—and there are agencies ready to enforce those protections.

What Is an Arbitration Clause?

An arbitration clause is a contract term that requires disputes to be resolved in private arbitration instead of court.

Employers use them because arbitration is often:

• Less public

• Less expensive

• More favorable to the employer

But here’s the catch: arbitration clauses can’t override civil rights laws.

The Supreme Court Case That Changed Everything

The U.S. Supreme Court settled this issue in EEOC v. Waffle House (2002).

In that case, an employee had signed an arbitration agreement. When the EEOC (Equal Employment Opportunity Commission) wanted to sue Waffle House on his behalf for violating the Americans with Disabilities Act (ADA), the company argued the arbitration clause blocked the lawsuit.

The Court disagreed.

Justice John Paul Stevens wrote:

“An agreement between an employer and an employee to arbitrate employment-related disputes does not bar the EEOC from pursuing victim-specific judicial relief, such as backpay, reinstatement, and damages, in an ADA enforcement action.”

In plain English: Even if you signed an arbitration clause, the EEOC can still take your employer to court and win remedies for you.

What About State Agencies?

It’s not just the EEOC. Almost every state has a civil rights agency with similar power.

Examples include:

• New York State Division of Human Rights

• California Civil Rights Department

• Illinois Department of Human Rights

These agencies investigate discrimination claims based on:

• Disability

• Race

• Gender and gender identity

• Religion

• Sexual orientation

• Age

• And other protected classes

And just like the EEOC, they are not bound by your arbitration clause.

Why This Matters for Employees

Arbitration clauses are especially common at big companies like Google, Amazon, and Meta. These clauses can make employees feel powerless—like they have no real recourse if something goes wrong.

But the reality is different. Even with arbitration in place, you may still have an ace up your sleeve.

Through the EEOC or your state agency, you can pursue:

• Backpay (wages you lost due to discrimination)

• Reinstatement (if you were wrongfully terminated)

• Compensatory damages (for harm and emotional distress)

Steps You Can Take if You Face Discrimination

1. Don’t assume arbitration is the end of the story.
   Agencies like the EEOC can still act on your behalf.

2. Document everything.
   Keep records of discriminatory actions, emails, or conversations.

3. File a charge with the EEOC or your state agency.
   Each has a set process for submitting claims.

4. Get legal advice.
   An employment lawyer can guide you through options beyond arbitration.

The Bottom Line

Employers may rely on arbitration clauses to discourage workers from speaking up. But your rights don’t vanish because of fine print.

If you’ve been discriminated against, you still have legal protections under federal and state law—and agencies with the power to enforce them.

So, don’t let an arbitration clause silence you. If your employer runs afoul of civil rights laws, you still have tools to fight back.